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Belgian Stock Exchange Tax compatible with European freedoms and principle of equality

In answer to a request for preliminary ruling by the Belgian Constitutional Court, the Court of Justice of the European Union (hereafter: CJEU) had held on 30 January 2020 that the Belgian Stock Exchange Tax for transactions via foreign intermediaries is compatible with the freedom to provide services (Art. 56 TFEU and Art. 36 EEA Agreement). [1] Now, on 4 June 2020, the Belgian Constitutional Court has delivered its final judgment. The Court confirms, in line with the reasoning of the CJEU, that Belgian legislation is compatible with EU law, and furthermore with the constitutional principle of equality. [2]


As of 1 January 2017, the scope of Belgian stock exchange tax was broadened to cover also transactions that are carried out on behalf of Belgian tax residents via a foreign intermediary or (internet) trading platform. Shortly after, several actions for annulment were brought before the Belgian Constitutional Court against it, arguing that the new legislation is incompatible with the Belgian Constitution (principle of equality) and the European free movement of capital and the freedom to provide services.  Specifically, it was pointed out that it can be more expensive and administratively burdensome for a Belgian tax resident to invest via a foreign intermediary. Before issuing its own judgment, the Belgian Constitutional Court submitted preliminary questions with the CJEU. On 30 January 2020, the CJEU ruled that the new legislation introduced a difference in treatment that could discourage Belgian residents from using foreign intermediaries and thus results in a restriction on the freedom to provide services. However, it considered that the difference in treatment and related measures are justified by overriding reasons, namely to ensure the effectiveness of tax collection and fiscal supervision and to combat the evasion of Belgian Stock Exchange Tax, and are proportional.

Decision of the Constitutional Court

Taking into consideration the CJEU judgment of 30 January 2020, the Belgian Constitutional Court now also ruled that there is indeed a difference in treatment, but that this difference is based on an objective criterion, namely the place of establishment of the intermediary called upon by the Belgian resident giving the order. This criterion is relevant since it relates to the obligation for each Belgian resident to pay tax on their exchange transactions. The dual purpose of the legislator, namely avoiding unequal competition between intermediaries established in and outside Belgium as well as increasing legal certainty, should be considered as legitimate. The Court also refers to the possibility for a foreign intermediary to appoint a liable representative in Belgium, to whom the obligations relating to the declaration and payment of the tax may be assigned and the possibility for a Belgian resident (ordering party) to appoint a proxy-holder to declare and pay the tax on their behalf. Consequently, the appeal for annulment is rejected by the Constitutional Court, so that the legislation remains fully applicable.


Given the CJEU judgment of 30 January 2020, the ruling of the Belgian Constitutional Court is in line with expectations, and Belgian investors as well as foreign intermediaries will have to live with it. Other practical and legal issues of Belgian stock exchange tax remain, though. For instance, imposing stock exchange tax on mandatory corporate actions that are concluded or executed via a foreign intermediary, which occurs in practice, seems contrary to the law, absent a direct or indirect order by the investor. In the longer run, the EU might, in search of new revenue sources, decide to pursue with new energy plans for a Financial Transaction Tax (FTT), which would be likely to require changes to the Belgian stock exchange tax rules.  So, to be continued...


[1]Previous tax flash: “

[2] Constitutional Court, decision n°. 79/2020 of 4 June 2020 (Rolnr. 6681).

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Kris Lievens

Corporate Tax

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Stefanie Pauwels
Tax Partner

Corporate Tax

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